Exhibit
10(m)
As
Amended By B/D 10/9/00
XEROX
CORPORATION
1998 EMPLOYEE
STOCK OPTION PLAN
ARTICLE
I—Purpose of the Plan
The
purpose of the Xerox Corporation 1998 Employee Stock Option Plan
(“Plan”) is to increase the ownership interest in the
Company of eligible employees of the Company so as to align such
interests with those of the shareholders of the Company and to
provide a further incentive to serve as an employee of the Company
through the issuance of stock options.
ARTICLE
II—Definitions
Unless the
context clearly indicates otherwise, the following terms shall have
the following meanings:
2.1
“Administrator” means the individual and/or Committee
or subcommittee referred to in Paragraph 3.1 as the case may
be.
2.2
“Award Summary” means the award summary or the
agreement delivered by or on behalf of the Administrator to each
Optionee upon grant of an Option under the Plan which shall set
forth details of each Option, including, without limitation, number
of shares, option exercise price, Exercise Period, Waiting Period
and exercise dates.
2.3
“Board” means the Board of Directors of the
Company.
2.4
“Change in Control” shall be deemed to have occurred if
(A) any “person” (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)), other than (1) the Company,
(2) any trustee or other fiduciary holding securities under an
employee benefit plan of the Company, (3) any company owned,
directly or indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership of stock of
the Company, or (4) any person who becomes a “beneficial
owner” (as defined below) in connection with a transaction
described in clause (1) of subparagraph (C) below, is or
becomes the “beneficial owner” (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company (not including in the securities
beneficially owned by such person any securities acquired directly
from the Company or its affiliates) representing 20% or more of the
combined voting power of the Company’s then outstanding
securities; (B) the following individuals cease for any reason
to constitute a majority of the directors then serving: individuals
who, on October 9, 2000 constitute the Board and any new
director (other than a director whose initial assumption of office
is in connection with an actual or threatened election contest,
including but not limited to a consent solicitation, relating to
the election of directors of the Company) whose appointment or
election by the Board or nomination for election by the
Company’s shareholders was approved or recommended by a vote
of at least two- thirds of the directors then still in office who
were directors on October 9, 2000 or whose appointment,
election or nomination for election was previously so approved or
recommended; (C) there is consummated a merger or
consolidation of the Company or any direct or indirect subsidiary
of the Company with any other corporation other than (1) a
merger or consolidation which results in the directors of the
Company immediately prior to such merger or consolidation
continuing to constitute at least a majority of the board of
directors of the Company, the surviving entity or any parent
thereof or (2) a merger or consolidation effected to implement
a recapitalization of the Company (or similar transaction)
in
which no
person is or becomes the beneficial owner, directly or indirectly,
of securities of the Company (not including in the securities
beneficially owned by such person any securities acquired directly
from the Company or its affiliates) representing 20% of more of the
combined voting power of the Company’s then outstanding
securities; or (D) the shareholders of the Company approve a
plan of complete liquidation or dissolution of the Company or there
is consummated an agreement for the sale or disposition by the
Company of all or substantially all of the Company’s assets,
other than a sale or disposition by the Company of all or
substantially all of the Company’s assets to an entity, at
least 50% of the combined voting power of the voting securities of
which are owned by stockholders of the Company in substantially the
same proportions as their ownership of the Company immediately
prior to such sale.
2.5
“CIC Price” means the higher of (a) the highest
price paid for a Share in the transaction or series of transactions
pursuant to which a Change in Control of the Company shall have
occurred, or (b) the highest price paid for a Share during the
60 day period immediately preceding the date upon which the event
constituting a Change in Control shall have occurred as reported in
The Wall Street Journal in the New York Stock Exchange Composite
Transactions or similar successor consolidated transactions
reports.
2.6
“Company” means Xerox Corporation.
2.7
“Employee” means each employee of the Company or of any
entity that is directly or indirectly controlled by the Company all
of whom are eligible for grants under the Plan.
2.8
“Exercise Period” means the date which is eight years
after the Option Grant Date of such Option.
2.9
“Fair Market Value” means, with respect to any date,
the average between the highest and lowest sale prices per Share in
the New York Stock Exchange Composite Transactions on such date as
reported in the Wall Street Journal, provided that if there should
be no sale of Shares reported on such date, the Fair Market Value
of a Share on such date shall be deemed equal to the average
between the highest and lowest sale prices per Share in such
Composite Transactions for the last preceding date on which sales
of Shares were reported.
2.10
“Option” means an option to purchase Shares awarded
under the Plan which does not meet the requirements of
Section 422 of the Internal Revenue Code of 1986, as amended,
or any successor law.
2.11
“Option Grant Date” means the effective date of an
option grant under the terms of the Plan.
2.12
“Option Surrender Right” has the meaning specified in
Paragraph 6.4.
2.13
“Optionee” means each person to whom an Option has been
granted.
2.14
“Plan” means the Xerox Corporation 1998 Employee Stock
Option Plan, as amended and restated from time to time.
2.15
“Shares” means shares of the Common Stock, par value
$1.00 per share, of the Company.
ARTICLE
III—Administration of the Plan
3.1
Administrator of Plan. The Plan shall be administered by the
individual who is the Vice President of the Company then having
responsibility for Human Resources other than in respect of matters
relating to officers of the Company who are subject to
Section 16 under the Securities Exchange Act of 1934, as
amended (“Section 16 Officers”). The Plan shall be
administered in respect of Section 16 Officers by the
Executive Compensation and Benefits Committee of the Board of
Directors of the Company or the successor to such Committee or by a
subcommittee of such Committee.
3.2 Authority
of the Administrator. Except as otherwise provided herein, the
Administrator shall have full power and authority to
(i) designate the Employees to whom Options are to be granted,
(ii) determine the number of Shares to be covered by each
Option, (iii) determine the terms and conditions of Options
granted under Plan, (iv) interpret and construe the Plan,
(v) adopt such rules and regulations as the Administrator
shall deem necessary and advisable to implement and administer the
Plan and (vi) designate persons to carry out the
Administrator’s responsibilities, subject to such
limitations, restrictions and conditions as the Administrator may
prescribe, such determinations to be made in accordance with the
Administrator’s best business judgment as to the best
interests of the Company and its shareholders and in accordance
with the purposes of the Plan. Options granted and the number of
shares covered by Options shall be based upon one or more measures
of Company performance selected by the Administrator.
ARTICLE
IV—Shares Subject to the Plan
The
total number of Shares which may be issued upon exercise of Options
under the Plan shall be 25,000,000 subject to adjustment as
provided in Article IX. Any S
